In this Sept. 16, 2018, file photo, American flags are displayed together with Chinese flags on top of a trishaw in Beijing.. (AP Photo/Andy Wong, File) The National Defense Authorization Act has become one of Congress’s main vehicles for countering China’s military and technological ambitions. This year’s annual defense bill should also address a gap closer to home: the weak disclosure regime governing foreign money flowing into American universities and the risks that can follow.
America’s higher education system underpins U.S. national security. Its institutions educate the scientists and engineers America needs, conduct federally funded research, and generate discoveries that shape future battlefield advantage. Those same strengths make colleges and universities attractive to foreign governments seeking influence, access, and proximity to sensitive research networks. China sits at the center of that concern because Beijing treats higher education as another arena for strategic advantage.
Recent congressional investigations have put those risks into sharp focus. The House Select Committee on Countering the Chinese Communist Party and the House Education and Workforce Committee found that hundreds of millions of dollars in U.S. taxpayer-funded research contributed to China’s military and technological advancement through joint research and university partnerships. The committees highlighted collaborations in sensitive fields such as artificial intelligence, quantum technology, hypersonics and nuclear physics. They also raised concerns about U.S.-China joint institutes connected to Chinese institutions with defense or security ties.
Foreign funding transparency matters beyond research security. Gifts, contracts and partnerships can create dependencies, obscure conflicts of interest, and give foreign governments a foothold inside universities. Any one relationship may appear manageable on its own. Across a university system, those relationships can reveal patterns of access and influence that policymakers need to see. Today’s disclosure system does not provide that view.
Section 117 of the Higher Education Act generally requires colleges and universities to report foreign gifts and contracts when they reach $250,000 or more from the same foreign source in a calendar year. That threshold may sound significant. The record tells a different story. After the Education Department began enforcing the law more aggressively in 2019, universities reported roughly $6.5 billion in previously undisclosed foreign gifts and contracts. Senate investigators also found that many schools with Confucius Institutes failed to report tens of millions of dollars in Chinese government funding.
More recent Department of Education disclosures point to the same problem. Federal data show roughly $405 million in reported university transactions tied to foreign entities already flagged on U.S. government watchlists or restricted lists. Some involve entities on the Commerce Department’s Entity List, which identifies parties subject to export-control restrictions. Others involve firms on the Defense Department’s Section 1260H list of Chinese companies linked to China’s military, including Chinese telecommunications company Huawei.
In light of these findings, Congress is weighing stronger mandatory disclosure requirements for the defense bill. The measures under consideration would lower the general reporting threshold from $250,000 to $50,000 and require full disclosure for countries of concern, including China, Russia, Iran, and North Korea. They would also strengthen enforcement and improve public access to foreign funding data. The purpose appears straightforward: give Congress, federal agencies, universities, students, and the public a clearer view of foreign money flowing into American higher education.
Better disclosure would also improve implementation. Foreign funding data is most useful when agencies can compare it against existing risk indicators, including export-control restrictions, defense-related entity lists, and prior research-security concerns. That would help the federal government assess risk before grants are awarded, partnerships deepen, or universities become dependent on opaque foreign funding streams.
Just as important is what these new requirements would not do. They would not bar foreign students from attending American colleges and universities. Nor would they restrict lawful study in the U.S., impose nationality-based enrollment rules, or curtail legitimate academic exchange. Their focus is disclosure: foreign gifts, contracts, partnerships, counterparties, and the terms attached to them.
That distinction matters, because America’s openness to global talent remains a strategic advantage. Transparency helps preserve that openness by separating legitimate academic exchange from relationships that create hidden risk.
That is the right frame for the defense bill. Congress already scrutinizes China’s access to supply chains, procurement networks, sensitive technologies and federally funded research. Foreign money flowing through the universities that help produce those capabilities deserves similar attention. As lawmakers weigh China-related measures in this year’s defense bill, foreign funding disclosure should be part of the discussion.
The goal is not to close America’s campuses to the world. It is to ensure the U.S. can see who is trying to buy access to them.
Craig Singleton serves as a senior fellow at the non-partisan Foundation for Defense of Democracies, having previously served as a U.S. diplomat.
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